This Forgotten South African Share Poised for a Comeback

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

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SASOL LIMITED (SOL) MONTHLY

• Primary Category: Structural Reversal / Accumulation Phase 🔵

• Expected Path: Base Building / Continuation toward 14,000c ⚪

• Strategic Overlay: Buy Structural Support / Long-term Accumulation 🟡

Highlights: Sasol Limited

• Fractal Momentum Divergence: A complex momentum profile is emerging. While Ultra Short Term indicators on the Monthly chart are trending upward into Neutral/Strong territory, Daily and Weekly signals show higher volatility. This indicates that long-term institutional "bottom-fishing" is beginning to absorb the selling pressure seen in the shorter cycles.

• Cyclical Turnaround: SOL is attempting a massive structural reversal from deep multi-year lows. The Monthly chart reveals a price pattern that has potentially bottomed near the 5,301c level in 2025, which remains the key long-term invalidation zone. This "sleeping giant" is now entering a base-building phase as it tries to reclaim higher structural ground.

• Daily Overheat Warning: Despite the long-term bottoming effort, the stock is volatile in the Short Term (approx. 1 to 10 days). Recent vertical spikes to 11,118c have pushed short-term oscillators high, suggesting a lateral consolidation or minor pullback to the 8-day EMA is necessary to reset momentum gauges.

• The Weekly "Engine Room": The Weekly chart shows early signs of a bullish regime shift, though it remains under pressure compared to banking peers. All four trend timeframes on the weekly basis are attempting to slope upward, but the price must firmly hold above recent consolidation lows to confirm the Medium Term (approx. 2 to 4 weeks) structural trend has shifted to "Strong".

• Breakout at Resistance: Price action is currently challenging a minor monthly pivot zone near 11,200c. A definitive monthly close above this level would technically confirm the first leg of a secular turnaround, unlocking targets toward the 14,500c - 17,000c range.

Best Action Timeline:

• 3 to 5 days (1 week): Wait / Trim. Daily volatility remains high following a recent nearly 6% single-session surge. Expect choppy price action as the market digests these gains.

• 6 to 10 days (2 weeks): Accumulate. Once the short-term overextension state cools in the Medium Term (approx. 2 to 4 weeks), look to enter or add to long positions near the 75-day EMA / 21-week EMA.

• 11 to 15 days (3 weeks): Ride the Trend. If the recent structural lows hold, aligned weekly momentum should drive the next leg higher towards the 12,500c resistance zone.

• 16 to 20 days (4 weeks): Monitor Monthly Close. A monthly close above 11,118c would provide the high-conviction signal needed for a sustained Long Term (approx. 5 to 8 weeks) recovery.

Scenarios:

• 🟢 Bullish Scenario: Structural Recovery: Price clears immediate resistance and begins a steady climb toward analyst targets of 17,193c, supported by a rally in global energy prices.

• ⚪ Base Scenario: Base-Building Churn: The stock remains range-bound between 9,500c and 11,500c, allowing the 50-week EMA / 200-day SMA to catch up and provide a solid floor for the next move.

• 🔴 Bearish Scenario: Support Failure: A failure to hold the 8,000c psychological support triggers a retest of the 5,301c secular low, signaling the recovery attempt has failed.

Key Actionable Zones

• Immediate Resistance: 11,200c (Recent High / Climax Pivot).

• Target 1: 13,200c (Target Range).

• Pivot Support: 9,250c (Recent Intraday Consolidation Low).

• Critical Structural Support: 7,500c - 8,000c (Historical Pivot Zone).

Core Thesis Sasol is an "early-stage structural recovery" play coming off a severe multi-year bear market. While short-term indicators are volatile, the long-term Monthly structure is attempting to bottom, offering potentially high reward-to-risk for patient investors. The setup favors gradual accumulation on dips rather than chasing vertical breakouts until the 200-day SMA is firmly reclaimed.

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Previous Post (05 December): This note is being published pre-market (Friday, 05 December) therefore there is no price action to provide confirmation. We do however, want to remain mindful of the potential for a 'PIERCING LINE (BULLISH REVERSAL)' TECHNICAL FORMATION. The pivot level for that is yesterday's low of 10409c. If the share remains below the pivot level, that would mean that there is no confirmation/trigger for the setup, yet.

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Trading Notes/Resources (Where Applicable)

READY TO TRADE: ACTIONABLE AREAS: For active traders who look to generate cash flow on a continuous basis, determining the ‘next best probability’ level to execute against may be of immense value. The blue and red horizontal lines on the chart represent a next best probability buy re-entry range and a next best probability sell re-entry range over the short term. The ranges assume no existing position being held by a trader while the probabilities are based on several factors which may include: short term rating, medium term regime, momentum, horizontal or diagonal support/resistance, candle structure, moving averages and standard deviation, among others. These are short term levels and may be in contrast to medium and long term outlooks which are based on the weekly and monthly charts and, which may be applicable to long term investors. These levels are subject to change based on sentiment, the subsequent price action and company/sector specific or macro news flow. As always, while the levels are outlined, traders should be prepared to adjust in real-time based on the aforementioned.

"Strategy Alerts" help clients identify trading opportunities. When a ticker's real-time or pre-market price action aligns with the criteria on a slide—such as a pullback to the 21-day EMA or a breakout from a consolidation base—it effectively "matches" that stock to the strategy, triggering an alert to a potential trading opportunity. This approach transforms the playbook into a dynamic scanning tool, allowing you to instantly categorize active stocks by the specific technical thesis playing out, ensuring that every trading potential opportunity communicated is backed by a predefined, actionable setup.

THE TACTICAL TRADING GUIDE (PRICE ACTION MODEL): UNCOVER OPPORTUNITIES & ASSESS REWARD-TO-RISK

• It helps helps clients determine and shed light on the some of the following:

• The CURRENT TECHNICAL POSITION and a PRICE ACTION PROBABILITY for multiple time frames.

• Three (3) ‘trading’ time frames are considered: Short Term (1 to 10 days) / Medium Term (2 to 4 weeks) and Long Term (5 to 8 weeks)

• Whether the reward-to-risk is attractive for a buy/long position

• Whether a share is weak. In this case, wait until the price stabilizes before looking to enter (i.e. want until it stops going down)

• Whether aggressive buying is underway. In this case, do not ‘chase’ (do not buy) but instead wait for a pullback to re-enter a buy or an overextension with deteriorating candle structure to sell/short.

• Whether a trader can look to buy a pullback into a key moving average (continuation trade)

• Whether a share needs to break a range for a new trend to be determined (bullish or bearish)

• Whether a traders needs to monitor for a change of character that could lead to a bullish or bearish reversal

• Whether a share could start a consolidation phase or before continuing it’s bullish or bearish trend

• Whether the upward momentum is slowing (if it's in a bullish phase)

• Whether buyers can look to 'phase in' to a position (if it's in a bearish phase)

• Whether a share lacks directional bias.

• The data set is available in real-time (on request)

• The readings are subject to change as the price action develops.

TRADING TIP # 1 Let The Candle Confirm 

Out of all those available, Candlestick Charts are the most widely used when it comes to analyzing price from a technical perspective. The interpretation thereof helps traders to understand the interaction between market participants and informs who is in control between buyers and sellers. Various types of candle formation convey key information about the range of outcomes for a share for example, following a downward trend, a long lower tail, doji, piercing or bullish engulfing suggests that buyers have started to become active/started to take an interest while following an upward trend, a long upper tail, doji, dark cloud cover or bearish engulfing suggests that sellers have started to become active/started to take an interest. While information is conveyed pre-market, it is the intraday price action that will confirm any trade or opportunity. While we have a plan, we are also ready to switch gears as the price action develops.

TRADING TIP # 2: Failure & Reclaim

FAILURE to hold a prior session high/range high may signal that the upside momentum is slowing and that an opportunity to short/sell may be at hand. This is often reflected via a deteriorating candle structure which suggests that sellers are starting to take control. Examples of such candles are long upper tails, doji's, dark cloud covers, bearish engulfing candles etc. RECLAIMING a prior session low/range may signal that the downside momentum is slowing and that an opportunity to buy may be at hand. This is often reflected via a improving candle structure which suggests that buyers have started to enter and are looking to take control of the price action. Examples of such candles are long lower tails, doji's, piercing candles, bullish engulfing candles etc.

TRADING TIP # 3: Take Note of the 'Igniting Bar' 

This is a large green or red candle which suggests that traders should: TAKE NOTE note of the change in characters and potential change of the trend. TAKE NOTE of a potential acceleration of the trend. TAKE NOTE of potentially aggressive buy or selling Often, BIG MOVES start with BIG MOVES.

Core Trading Principles: Short and Medium Term

1. Trade with the primary trend.

2. Volume Matters. This represents the interest of large institutional investors who have the ability to move a share, both up and down.

3. Do not short/sell a share that is above, and in close proximity to it’s rising 8 and 21-day moving averages. This trend can persist for an extended period.

4. Ultra short term traders, if a share has advanced strongly over a 3-7 day period, book profits. You can always re-enter and do the same trade at lower levels.

5. If a share is printing a large bullish (green) candlestick following an extended move, use the strength to sell. The likelihood that the share retraces is high.

6. If a share is printing a large bearish (red) candlestick following an extended move to the downside, use the weakness to start a long position. The likelihood that the share rebounds is high.

7. Trade in the direction of the 20-day moving average, using the MA as a level to enter as well as a hard break thereof as a trailing stop-loss.

8. The 8 and 21-day moving averages often act as support and resistance levels. When they are turning down, use them as levels to sell into. The opposite applies when they are turning up.

9. The first back-test and undercut of the 50/75-day exponential moving average range has a high probability of holding as support or resistance. Buy or sell it for a 1-3 day move to generate cash flow.

10. Stocks above a rising 200-day moving average spend the majority of their time trending higher. The opposite applies when the 200-day is trending down.

11. Previous support can turn into resistance and previous resistance can turn to support. Use these zones as levels to trade against.

12. Support and resistance levels and key moving averages are ranges rather than exact levels. They often overshoot these zones before occasionally reversing at these levels.

13. Respect the FIB (Fibonacco) retracement zones. They often act as support and resistance levels.

14. ‘PAY-tience Pays’, however be nimble to react to opportunity to cut when a trade hasn’t been working.

15. Above all, know your time horizon.

Lester Davids

Senior Investment Analyst: Unum Capital